Tag Archives: Fannie Mae

During the question and answer session hosted by Zillow, President Obama reiterated his stated goals to bring a gradual end to Fannie Mae and Freddie Mac, to bring private capital into the housing market, and to offer affordable housing options--both rental options and 30-year mortgages. ""We're actually confident that the private market can step in, do a good job, and the government can be a backstop,"" Obama said, adding, ""In some ways it's a return to earlier models.""

Undeterred by rising mortgage rates, the majority of consumers polled in a Fannie Mae survey expressed belief that the market will continue to improve, with 53 percent saying they expect home prices will go up in the next year--though that figure does represent a decline of 4 percentage points from June's high. The share of respondents who believe interest rates will continue to rise over the next year increased another 5 percentage points over June to a new survey high of 62 percent.

In a speech Tuesday, President Barack Obama will stress the need for a new housing finance system based on specific core principles that include putting private capital first, ending Fannie Mae and Freddie Mac's ""failed business model,"" and ensuring broad access to the 30-year fixed rate mortgage, according to a fact sheet from the White House. ""Fannie Mae and Freddie Mac should be wound down through a responsible transition, and the government role during normal times should be no bigger than necessary to achieve the principles laid out here,"" officials stated in the fact sheet released prior to the speaking event in Phoenix.

Fannie Mae and Freddie Mac are eliminating the $500 incentive for competed borrower response packages starting August 1, according to separate bulletins issued by the GSEs. The GSEs also announced servicer incentives for Home Affordable Modification Program (HAMP) modifications will increase starting April 1, 2014.

National Mortgage Insurance Corporation (National MI) announced Wednesday it will insure about $5 billion in residential mortgages in its first risk transfer transaction with Fannie Mae.

Fixed mortgage rates increased this week following the Federal Open Market Committee's affirmation that it intends to stay the course on its bond purchasing policy. According to Freddie Mac's survey, the 30-year fixed-rate mortgage (FRM) averaged 4.39 percent (0.7 point) for the week ending August 1, up from 4.31 percent last week. Last year at this time, the 30-year fixed averaged 3.55 percent. Bankrate.com's weekly national survey also showed interest rates climbing slightly. The 30-year fixed average rose to 4.59 percent this week.

Undoubtedly, broadening eligibility for the Home Affordable Refinance Program (HARP) has allowed more borrowers to benefit from the program. However, HARP rules aren't the only obstacles stunting refinance volume. A report from the Federal Housing Finance Agency Office of Inspector General (FHFA OIG) found a lack of borrower education is also a critical barrier to the program. ""[M]any borrowers have not heard of the program, confuse the program with other government housing programs, or do not realize that they are eligible,"" the report stated.

Fannie Mae and Freddie Mac are raising the fixed interest rate for non-HAMP (Home Affordable Modification Program) modifications. The new interest rate adjustments serve to reflect current market conditions and will be applied to standard and streamlined modifications. Starting September 1, 2013, interest rates for modifications will rise from 4 percent to 4.625 percent.

Although policymakers have been busy introducing legislation to diminish the role of the GSEs, analysts at Moody's Investors Service ""believe GSE reform will not take place for at least a few more years."" In June, Senators Bob Corker (R-Tennessee) and Mark Warner (D-Virginia) led efforts to introduce legislation to wind down Fannie Mae and Freddie Mac in five years. Then came PATH from the House of Representatives Financial Services Committee in July.

The number of borrowers who refinanced through the Home Affordable Refinance Program (HARP) fell 20 percent month-over-month in May, data from the Federal Housing Finance Agency (FHFA) revealed. The GSEs refinanced 84,648 borrowers through HARP in May, down from 106,910 in April. Since HARP's 2009 inception, the program has refinanced over 2.6 million loans.